Video Game Consoles may Incur Increased Tax According to the USTR

A recent document published by the United States Trade Representative (USTR) which lists products that have a chance of incurring an additional tax, up to 25%, that the President wishes to impose on goods imported from China, include items such as video game consoles, controllers and even arcade machines.

Here are some of the products mentioned in the document:

8526.92.10 …….. Radio remote control apparatus for video game consoles.

8543.70.87 …….. Electrical machines w/translation/dictionary; flatpanel displays except for heading 8528 (except 8528.51/61);infrared video game controller.

9504.50.00 …….. Video game consoles and machines, other than those of heading 9504.30

And the summary of the document:

SUMMARY: In accordance with the direction of the President, the U.S. Trade Representative (Trade Representative) proposes a modification of the action being taken in this Section 301 investigation of the acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation. The proposed modification is to take further action in the form of an additional ad valorem duty of up to 25 percent on products of China with an annual trade value of approximately $300 billion. The products subject to this proposed modification are classified in the HTSUS subheadings set out in the Annex to this notice. The Office of the U.S. Trade Representative (USTR) is seeking public comment and will hold a public hearing regarding this proposed modification.

With the next generation of consoles from Sony and Microsoft coming within 2-3 years and most likely sporting a price point of $399 at minimum, a potential 25% increase in cost could have a fair bit of negative impact on their sales.